US cable TV giant in Virgin Media bid

Britain’s Virgin Media was last night in talks on the details of a multi-billion pound takeover bid by US cable TV giant Liberty Global.

Richard Branson may soon show Usain Bolt a new way forward for Virgin Media

News that the two companies were in late stage negotiations on a deal sent shares in the pay-TV, broadband and mobile phone soaring yesterday, lifting its stock market value to £7.8billion.

Created by the 2006 merger of struggling cable TV companies Telewest and NTL and the £700million takeover of Sir Richard Branson’s Virgin Mobile, Virgin Media now has 4.9million customers.

It has grown rapidly under chief executive Neil Berkett, who joined in 2008, and has become a major challenger to the dominance of Rupert Murdoch-controlled BSkyB.

A takeover would pitch Liberty and its chairman, American billionaire John Malone, against Sky and Murdoch and reignite the long-standing rivalry between the two men.

Virgin Media has its main stock market listing in New York but its London listed shares jumped a sizeable 16 per cent to 2889p, valuing the company at £7.8billion. Including debt, the value of a takeover could be more than £12.5billion.

Although Liberty is based in the US most of its businesses are in Latin America and Europe providing cable TV in 11 countries including Ireland where it owns the UPC network.

A takeover of Virgin Media would take it into the UK and make it a challenger to Sky which has 10.7million customers.

Branson retains a 3 per cent stake in the business worth £234million at last night’s closing price. His Virgin Group receives a royalty payment of about £10million a year for use of the Virgin name.

Malone, whose business has 19.6million customers, clashed with Murdoch a decade ago when his Liberty group vied with Murdoch’s NewsCorp for control of US satellite broadcaster DirecTV.

It ended with NewsCorp selling its one-third stake in DirecTV to Malone’s group which in turn sold its 16 per cent stake in NewsCorp to the Murdochs.

Analysts at Bernstein Research said a takeover of Virgin Media by Liberty would make it a more attractive take- over target for Britain’s Vodafone and said one of the reasons for the deal was to become “a better bride for Vodafone”.

Virgin Media has become a major challenger to the dominance of Rupert Murdoch-controlled BSkyB.

Virgin Media has its main stock market listing in New York but its London listed shares jumped a sizeable 16 per cent to 2889p, valuing the company at £7.8billion. Including debt, the value of a takeover could be more than £12.5billion.

Although Liberty is based in the US most of its businesses are in Latin America and Europe providing cable TV in 11 countries including Ireland where it owns the UPC network.

A takeover of Virgin Media would take it into the UK and make it a challenger to Sky which has 10.7million customers.

Branson retains a 3 per cent stake in the business worth £234million at last night’s closing price. His Virgin Group receives a royalty payment of about £10million a year for use of the Virgin name.

Rupert Murdoch could seen be competing with American billionaire John Malone for UK TV customers

Malone, whose business has 19.6million customers, clashed with Murdoch a decade ago when his Liberty group vied with Murdoch’s NewsCorp for control of US satellite broadcaster DirecTV.

It ended with NewsCorp selling its one-third stake in DirecTV to Malone’s group which in turn sold its 16 per cent stake in NewsCorp to the Murdochs.

Analysts at Bernstein Research said a takeover of Virgin Media by Liberty would make it a more attractive take- over target for Britain’s Vodafone and said one of the reasons for the deal was to become “a better bride for Vodafone”.